Dick's learns how markets work

4 December 2018

NormanL

Remember when Dick's Sporting Goods said it would no longer sell "assault" weapons in its stores and refuse to sell firearms to anyone under the age of 21? We said the company was free to do whatever it wished, but should not be surprised if a good portion of its customer base decided to take its business elsewhere.

Dick’s Sporting Goods Inc. is paying a price for its decision earlier this year to stop selling guns to people under 21 as sales continued to sag in its latest quarter.

Sales at existing stores and websites fell 3.9% for the three-month period ended Nov. 3., driven down by weakness in the company’s hunting and electronics departments, executives said on a conference call with analysts on Wednesday. Those categories accounted for over half of the decline. Weak gun sales also hit other areas like outdoor equipment because fewer hunters are coming to stores, said Lee Belitsky, chief financial officer at Dick’s. It was the chain’s fifth consecutive quarter of sales declines.

In February, Dick’s said it would stop selling assault-style guns and would no longer sell guns and ammunition to people under 21 years old in the wake of a shooting at a Florida high school that killed 17 people. At the time, Walmart Inc. also stopped selling guns and ammunition to those under 21, but the retail giant hasn’t said the decision created a slowdown in sales.

Walmart is a far larger, and much more diversified retailer than Dick's, so the comparison isn't very accurate. Still, the whole episode reminds us that markets work. If sellers alienate their customers, those customers will make their purchases elsewhere.